Statutory Authority of the ECB
Under T.C.A. § 7-86-304, the State 911 Board is authorized to supervise and evaluate financially distressed districts, and can prescribe a rate structure that eliminates the fiscal distress. T.C.A. § 7-86-304(d) provides that:
- Any emergency communications district that is a financially
distressed emergency communications district shall be subject to the supervision
and evaluation to the board. For the purposes of this chapter, a 'financially
distressed emergency communications district' is a district, which, as
shown by the annual audits:
- Fails to produce revenues sufficient to provide for all expenses
and maintenance of the district, including reserves thereof, for a
period of three (3) consecutive years;
- Has a deficit retained earnings balance; or
- Is in default on any indebtedness.
- After reviewing the financial statements of any financially distressed
emergency communications district, and after holding a public hearing
within such districts service area, the board may prescribe a rate structure,
up to the maximum established pursuant to § 7-86-108(a)(2)(A), to be adopted
by the district, as may be necessary to cause the district to liquidate
in an orderly fashion any retained earnings deficits and/or to cure a
default on any indebtedness of the of the district.
T.C.A. § 7-86-304(e) further provides
- "If the board of an emergency communications district fails to adopt the prescribed rate structure, the board may, in addition to any and all other remedial actions available to it, petition the chancery court in a jurisdiction in which the emergency communications district is operating to require the adoption of the rate structure prescribed by the board or such other remedial actions, which, in the opinion of the court, may be required to cause the district to be operated in accordance with the provisions of state law."
Under T.C.A. § 7-86-305, the State
911 Board has the statutory authority to study the consolidation or merger
of the distressed district with another ECD.
- As a means to restore financial stability to financially
distressed emergency communications districts and to ensure continued
911 service for the benefit of the public, the board may study the possible
consolidation or merger of two (2) or more adjacent emergency communications
districts if at least one (1) such emergency communications district
is financially distressed. In the event that the board determines that
such a consolidation or merger is in the best interest of the public,
and after holding public hearings within the service areas of the affected
emergency communications districts, the board may order the consolidation
or merger. The board shall establish rules and policies concerning the
composition and selection of the board of directors, and shall establish
technical and operating standards and a rate structure for such multi-jurisdictional
emergency communications district; provided, that such action shall
not threaten the financial integrity or stability of the affected mergency
communications districts, or the level and quality of 911 service.
- Notwithstanding the provisions of subsection (a) to the contrary,
a merger or consolidation affecting a non-financially distressed emergency
communications district shall not become effective without the prior
approval of the board of directors of such non-financially distressed
emergency communications district.
Current Status of Financially Distressed Districts in Tennessee
- There are currently two (2) Financially Distressed Districts in Tennessee, the lowest number since the Emergency Communications Board was created in 1998. They are Hawkins County Emergency Communications District and Sequatchie County Emergency Communications District.